Future beer: Predictions for 2018

Peering into their crystal mugs, experts see a bright 2018 for craft beer.

For craft beer in general, that is. For individual craft brewers, the outlook is much murkier.

“Overall spending on craft beer will continue to rise,” said Ed Ashley, who studies the beer industry at Cal State San Marcos’ College of Business Administration. “However, fewer will share in the revenues.”

Prognosticating is an art, not a science. Still, it’s striking how many experts echo Ashley in foreseeing more consolidation ahead among local breweries.

“I think we are going to see some merging of the smaller ones,” said Susie Baggs, owner of Brown Bag Beverage, a San Diego-based distributor of craft beer. “I also think we’ll see some collaborations.”

Courtesy photo

Susie Baggs, owner of Brown Bag Beverage craft beer distributor.

Susie Baggs, owner of Brown Bag Beverage craft beer distributor.

(Courtesy photo)

Also likely, in Baggs’ view: two or more breweries sharing brewing space, tasting rooms and distribution channels, yet still operating as separate businesses. And expect to see more medium-sized local breweries acquire smaller players, such as this year when Coronado Brewing purchased Monkey Paw.

The consolidation craze will also mean that San Diego in 2018 will see fewer new breweries open than in “the go-go days of 2016,” said Russ Gibbon, the business development director for the City of San Diego.

Within the city limits, 16 new breweries opened in ’16.

What’s likely in ’18? “Fewer than five,” Gibbon said.

However, there will be a significant increase in the number of tap rooms, he added, as the region’s 150-plus breweries struggle to stand out from the pack.

That will be increasingly difficult next year, Ashley said.

“Some new ones will still open,” he said. “More smaller, ill-capitalized ones will fade away.

“That said, there will be more opportunity for consolidation among the smaller brewers. The better business-minded ones should acquire other smaller ones to expand their brand portfolios and to grow.”